Telecoms: European Commission urges Lithuanian telecoms regulator to take action on the broadcasting licensing regime

The European Commission today has warned the Lithuanian national telecoms regulator, Ryšių reguliavimo tarnyba(RRT), that obliging terrestrial broadcasters to use specific suppliers to transmit their programmes constitutes a barrier to competition and prevents new terrestrial transmission service providers from entering the market. The Commission says that regulators no longer need to intervene in broadcasting markets in principal. However, RRT intends to continue regulating Lithuanian terrestrial broadcasting markets because of the exclusive market position that has been granted to transmission service providers Lietuvos radijo ir televizijos centras (LRTC) and TEO.

"Lithuanian authorities must ensure that their licensing regime does not hamper effective competition in broadcasting transmission markets,"said Viviane Reding, the EU Telecoms Commissioner."These markets no longer warrant regulation in the EU due to greater competition in many Member States and the transition from analogue to digital broadcasting."

Competition Commissioner Neelie Kroes said:"The current broadcaster licensing regime grants certain transmission service providers a monopoly to transmit their content and stops alternative transmission infrastructures from emerging. This situation seriously hampers competition and is detrimental both for most broadcasters and consumers."

On 4 December 2009, RRT informed the Commission it had analysed markets for analogue and digital terrestrial television and radio broadcasting transmission services. RRT defined seven relevant markets depending on whether frequencies are assigned to the broadcaster or the broadcasting transmission service provider.

RRT justified these narrow market definitions on the basis of thedifferent situations broadcastersface in the two types of markets:

Broadcasters using radio frequencies assigned to them may choose to develop their own infrastructure which they - to a large extent - install at the incumbent (LRTC's) sites, i.e. even if broadcasters install their own equipment, often they need to purchase broadcasting transmission facilities services from LRTC. Alternatively, broadcasters can opt to purchase the full range of broadcasting transmission services from another provider (mainly LRTC).

In contrast, broadcasters who use radio frequency assigned to the transmission service provider must purchase broadcasting transmission services from the provider that was appointed in their broadcasting licence. B roadcasting licences,issued by the Lithuanian Radio and Television Commission (Lietuvos radijo ir televizijos komisija) in tender procedures,specify the service provider (LRTC or TEO) which a broadcaster is allowed to use. Broadcasters have no choice of supplier.

In its letter the Commission has invited RRT to closely monitor market developments in terms of infrastructure and services competition, at retail and wholesale level, as competition may emerge from alternative platforms (e.g. cable and TV over internet (IPTV)) or because existing terrestrial transmission services infrastructure have been replicated.

The Commission has told RRT that the Lithuanian licensing regime for broadcasters is a legal obstacle to competition in five of the seven relevant markets. It also said it would reserve the right to examine whether the exclusive right granted by the Lithuanian Radio and Television Commission in broadcasters' licences to transmission service providers conforms with EU law. The Commission also said that its comments do not prejudge the outcome of a further review of the implementation of EU Directive 2002/77/EC on competition in markets for electronic communications networks in Lithuania.

Background:

The Commission's comments to RRT follow theArticle 7 procedureof the EU telecoms rules (MEMO/09/539). It enables national telecoms regulators to achieve effective competition in their national telecoms markets, while ensuring consistency across the EU, and requires them to notify the Commission of draft regulations. Where these concern market definitions or whether operators have significant market power, the Commission can require the regulator to withdraw the measure. Where they concern regulatory remedies it may make comments of which the regulator must take utmost account.

The letter sent to the Lithuanian regulator will be published, in the coming days, at: